Common buyer contingencies:

• Financing. This makes the deal dependent upon the buyer receiving the mortgage they're applying for, specifying cancellation rights and return of earnest money deposit if they can't arrange adequate or acceptable financing.

• Home inspection. If not satisfied with the home inspection report, the buyer could have the right to opt out of the contract.

• Home sale. Allows a specific timeframe for the buyer to sell his or her current home. (See seller contingencies below!)

• Clear title. The buyer wants to make sure you're selling a clear and marketable title to the property. If there are title defects, the buyer can withdraw from the deal.

• Return of earnest money. Should the transaction collapse because the buyer can't get the loan or because you can't or won't meet one of the contingencies, this clause refunds the buyer's deposit.

• Liability for fire or other hazards. If something happens to the house after the contract has been signed but before the buyer actually moves in, this clause protects the buyer from liability.

• Contract subject to attorney's approval. A savvy buyer will make sure his or her attorney reviews all your contingencies before agreeing to them.

Common seller contingencies:

• Inspection. You can limit the time the buyer has to order and approve an inspection report. You can specify that you have the right to exit the deal if the repairs will cost you over a certain amount.

• Buyer's home sale—your counter contingency. Sometimes you'll see an escape clause tied to whether the buyer's present home sells. Be careful of this one! Who knows how long it will take for the home to sell? It's best to ask your attorney to counter this contingency with your own, saying you can nix the deal if you get a better offer before the buyer's home sells.

Contingency tips.

• Every contingency, no matter who originated it, should have a definite timeframe. You don't want to take your home off the market for an indefinite amount of time, especially since the deal could fall through.

• Make sure everything is in writing! Every important exchange, in phone or in person, should be put on paper for a contract to stand up legally. Just jot down short notes to keep track of things like: "Sept. 23: buyer placed earnest money in escrow."

• No matter how excellent your writing skills, always consult your real estate attorney to craft clear, carefully thought-out contingency clauses for you. Remember, the purchase contract is a legally binding document.